The Central Board of Excise and Customs (CBEC) Chairperson, Smt Vanaja N Sarna today said that the proposed anti-profiteering authority that will monitor pricing behaviour of businesses will be up and running in a fortnight.
A selection panel led by Cabinet secretary P.K. Sinha has asked states to suggest candidates for the five-member authority, including the chairperson. The Union government has already sent a list of its nominees to states for state-level screening panels that are part of the authority’s ecosystem, said the CBEC chairperson.
State-level panels will watch out for instances of businesses not passing on benefits of tax reduction to consumers in the Goods and Services Tax (GST) regime.
“We are expecting nominations (to the Authority) from states in another two weeks. As soon as all these names come in, the Authority will be ready,” said Sarna.
The Authority will be assisted by a four-member standing committee with two state officials.
The authority has the power to apply anti-profiteering measures to appropriate case and can order the concerned business to reduce its prices or return the undue benefit availed along with interest to the recipient of the goods or service.
A profiteering business could lose its GST registration in rare cases.
During the two-year transition into the GST regime that started in July, the National Anti-profiteering Authority will step in and ask businesses that have not passed on full benefits of a reduced tax burden to consumers to make up for it with interest.
GST’s impact on prices is top on the minds of Union and state policy makers keen to demonstrate that the indirect tax reform benefits the ultimate consumer. That involves not just ensuring that benefits are passed on to consumers, but also convincing them that the higher tax rates they may see on invoices in many cases in the transparent GST regime do not mean that tax burden has gone up. Consumers were not aware of the real burden of embedded taxes on products and services in the earlier regime.
“Your invoice today specifies central GST, state GST and the cess where applicable. In the earlier regime, consumers could only see the standard rate of value added tax (VAT) of 14.5%, not the central excise duty levied at factory gates of 12.5%, which together led to an actual 27% tax burden. Today the same commodity may be at 18% GST. In the case of cosmetics taxed at 28% GST rate, the increase is only of one percentage point,” explained the CBEC chairperson.
